LG Energy Solution buys stake in China’s Greatpower Nickel & Cobalt Materials Co., Ltd.

■ Invest about KRW 35 billion to buy 4.8% of stake in Greatpower and sign a long-term purchase agreement

■ Secure a stable supplier of a total of 20,000 tons of Nickel, a key ingredient for electronic vehicle (EV) battery.
– The amount is enough to power 370,000 high-performing EVs (whose driving range is over 500km on a single charge).

 

LG Energy Solution takes stake in the Chinese battery materials firm to secure a core raw material for battery making.

On Sept 17, LGES has paid about 35 billion won in buying 4.8 percent of stake in Greatpower and joining recapitalization of the firm producing key components for EV battery including nickel and cobalt.

As a specialized refiner, Shanghai-based Greatpower established in 2006 is building a factory in China by aiming at mass-producing nickel (II) sulfate (NiSO₄) for EV battery in 2023.

With the purchased stake and long-term agreement, LGES plans to procure a total of 20,000 tons of nickel for 6 years starting with 2023. The amount is enough to empower around 370,000 units of high-performing EVs (can run at least 500 km on a single charge).

The 6-year agreement enabled LGES to preemptively responding to a surging global demand based on further enhanced core competitiveness by securing nickel, the key raw material for battery.

Along with anode, electrolyte, and separator, cathode is one of four main components for EV batteries and enhances battery capacity and output while accounting for about 40 percent of the producing cost of a battery cell.

Nickel is, in particular, a key component for cathode materials. If the nickel content becomes higher, the driving distance of EVs becomes longer on a single charge, so there is a growing trend for “high-nickel batteries.” For high-nickel lithium-ion (Li-ion) batteries with high capacity, the nickel content takes for over 80 percent of cathode materials.

LGES is scheduled to increase the share of producing high-nickel nickel, cobalt, manganese and aluminum (NCMA) battery for the third-generation EVs by beginning the production in the first half in 2022.

High-nickel NCMA batteries are NCM batteries with aluminum added, a relatively affordable raw material. The portion of nickel in NCMA batteries is to be 89 to 90 percent, whereas expensive cobalt accounts for less than 5 percent in cathode materials. Thus, stability, energy capacity, and even price competitiveness are all improved.

Global steel market researcher CRU estimates the global demand for nickel will grow to 3.32 million tons in 2024 from 2.39 million tons in 2020.

Meanwhile, LGES is also striving to stably procure core raw materials for the battery. It recently inked a deal with Australian-based raw material mining company Australian Mines on purchasing nickel and cobalt for a long term. LGES is going to receive 71,000 tons of nickel and 7,000 tons of cobalt for the next 6 years from the second half of 2024.

Moreover, LGES invested about 12 billion won to buy around 7 percent stake in Australian-based nickel and cobalt refiner Queensland Pacific Metals and signed a long-term purchase contract on nickel and cobalt with QPM in June 2021. By doing so, LGES is scheduled to ensure 70,000 tons of nickel and 7,000 tons of cobalt for a decade from the end of 2023.

LGES invested around 57.5 billion won in a European subsidiary of Solus Advanced Materials in December 2020 for SAM’s recapitalization. LGES is to receive elecfoil (copper foil for secondary battery) from SAM over the next 5 years from 2021. Elecfoil is a copper foil, an anode material for a Li-ion battery used in EVs. It serves as a support for maintaining the shape of electrode while releasing the heat generated inside to outside.

 

■ Summary on raw materials procurement schedule of LGES